Experts react to DB pension transfer ruling
By Tom Carnegie, 26 Mar 18
Pension experts have welcomed the clarity the Financial Conduct Authority (FCA) has established for defined benefit (DB) pension transfers through its updated rules. But they warn further, lengthy, consultation may not be the best way to address issues of poor practice that have come to prominence in recent months.
International Adviser spoke to several industry experts to get their response to the new FCA pension transfer rules. Click through the slides to see comments from:
- Royal London
- Aegon
- Fidelity
- Old Mutual Wealth
Updated rules
After nine months of consultation, the FCA announced several new rules today directly related to DB transfers. This includes a requirement for transfer advice to be provided as a personal recommendation that takes account of a consumer’s individual circumstances.
One key decision to come from the consultation is the FCA will “maintain the position at this stage” that an adviser should start from the assumption that a DB pension will be unsuitable for their client.
This was a backtrack, from June 2017, when the FCA said it would consider changing its starting assumption on suitability to a more neutral approach.
In addition to the updated rules, the FCA also published a consultation paper proposing further changes to its rules and guidance.
One of the key proposals being considered is if the FCA should intervene in relation to charging structures, and in particular, introducing a ban on contingent charging.
Tags: Aegon | DB pensions | FCA | Fidelity | Old Mutual | Royal London
Christopher Lean says:
Would it not have been a more balanced article if the opinions of firms with pension transfer permissions had been considered as well? The new rules will affect the way in which pension transfer advice is given and the companies quoted are not advisers.